Korea’s 2020 chicken production is expected to increase to 971,000 metric tons (up 2-percent from 2019) driven by new slaughter plant openings and carry-over capacity from high 2019 parental stock (PS) broiler inventory.
2021 chicken production is projected to rise only 0.9-percent as low farm-gate prices and uncertain demand continue to weigh on the industry. Despite the number of slaughtered chickens increasing by 3.4-percent during the first six months of 2020, chicken consumption has declined overall due to the COVID-19 pandemic.
Korea’s 2020 chicken imports are expected to decrease by 10-percent to 160,000 metric tons due to increased frozen domestic chicken inventory and reduced consumption. In 2021, Korea’s chicken imports are projected to increase by five percent to 168,000 metric tons due to steady demand for processed chicken products that can be easily consumed at home and the expected extra demand generated during the 2021 Tokyo Olympic games, according to a USDA GAIN report.
Steady demand for chicken meat, availability of feed from an ample grain crop in Russia and growing imports of soybean meal support production growth to 4.725 MМТ (RTC) in 2021. A weaker ruble will drive export initiatives but will harm margins from domestic sales due to increased costs of imported breeding flock, feed additives, veterinary medicine, and equipment maintenance.
Leading companies with complex value-added chains, multi-regional presence and access to credit are more resilient to lower margins. Industry leaders will further increase their market shares at the expense of smaller and less efficient players. The forecast for 2020 production is raised to 4.715 MМТ (RTC). One percent growth year-over-year reflects better-than-expected exports, namely to China, and low immediate impact on broiler industry operations from the pandemic-related recession. As of the date of the report, no COVID-related closures of chicken farms and processing plants have been reported, according to another USDA GAIN report.
